Agency of Human Services outlines midyear Medicaid budget adjustments, highlights MMIS, HealthConnect and Planned Parenthood funding shifts
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Summary
Agency of Human Services told the Senate Appropriations committee it plans contract amendments to the MMIS fiscal agent (just under $2 million gross), will pick up a one‑year state cost for Planned Parenthood services (~$1.13M) due to a federal moratorium, and seeks one‑time funding for a HealthConnect cloud migration (~$2.7M).
The Agency of Human Services (AHS) told the Senate Appropriations Committee on Jan. 14 that several midyear changes to the Medicaid budget require adjustments before the full FY27 budget is submitted.
An agency presenter said an amendment to the Medicaid Management Information System (MMIS) fiscal‑agent contract is “just under $2,000,000 gross,” of which the state’s share is roughly $200,000 because the work is development‑related and eligible for a 90/10 federal match. The presenter described the MMIS as “the big system that supports all the claims processing” and said the amendment reflects annual changes in that large system.
The committee was also told that Oracle license renewals supporting Vermont Health Connect increased beginning in July and will recur in the FY27 budget build. The presenter said licensing and related ongoing costs to keep HealthConnect secure are a major portion of a one‑time ask being moved into base funding.
On family planning, the presenter said a recent federal restriction means Medicaid may not pay Planned Parenthood with federal matching funds for one year; AHS will cover those payments entirely with state dollars for 2026. “We’re continuing to pay Planned Parenthood at the same rate, but we’re picking that all up on the state side,” the presenter said.
AHS also requested roughly $2.7 million in general fund one‑time money to support HealthConnect’s cloud migration and security compliance, describing the cost largely as licensing and service fees needed to keep the system current and secure.
Other items described to the committee included an FY26 half‑year impact from a change to Applied Behavior Analysis billing codes intended to prevent duplicate billing, and an unresolved reconciliation of contracted bed‑day payments that was projected at $7.9 million in December but the agency said the number is likely to be revised downward pending cross‑team data checks.
The agency said its program budget across three appropriations reflected a $33 million consensus update driven by caseload forecasts and persistently high cost‑per‑case figures, and reminded the committee that statutory rules limit use of reserves for base year shortfalls. The presenter emphasized these adjustments will be annualized and further detailed in the FY27 budget documents that AHS will submit in the coming weeks.
The committee did not take immediate action; staff asked for follow‑up materials and the agency pledged to provide updated bed‑day reconciliation figures and the annualized budget build for the next session.
